Does the Bor Restoration General Release impact the obligations of the Franchisee?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
The Franchise Agreement requires Franchisee to sign a general release as a condition of renewal, sale, termination, and franchise transfer.
These covenants shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law. b.
A franchisee may bring a lawsuit in Maryland for claims under the Maryland Franchise Registration and Disclosure Law. c.
Any claim under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise. d.
All representations requiring prospective franchisees to assent to a release, estoppel, or waiver of liability are not intended to nor shall they act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. e.
Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance.
Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. f.
To the extent this Addendum will be deemed to be inconsistent with any terms or conditions of said Franchise Agreement or exhibits or attachments thereto, the terms of this Addendum will govern. g.
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor.
This provision supersedes any other term of any document execute
Source: Item 23 — Receipts (FDD pages 40–202)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, the Franchise Agreement requires the franchisee to sign a general release under certain conditions. Specifically, a general release is required as a condition of renewal, sale, termination, and franchise transfer.
However, the FDD also includes an addendum specific to the state of Maryland. This addendum states that the covenants requiring a general release do not apply to any liability under the Maryland Franchise Registration and Disclosure Law. Furthermore, a franchisee in Maryland may bring a lawsuit for claims under this law within three years after the franchise is granted. The addendum clarifies that representations requiring prospective franchisees to agree to a release, estoppel, or waiver of liability are not intended to, and will not, act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.
This Maryland addendum also specifies that no statement, questionnaire, or acknowledgment signed by a franchisee in connection with the commencement of the franchise relationship will waive claims under any applicable state franchise law, including fraud in the inducement, or disclaim reliance on any statement made by the franchisor or anyone acting on their behalf. This provision supersedes any other term of any document executed. Therefore, while a general release is typically required, the obligations of the franchisee are protected under Maryland law regarding franchise registration and disclosure.